Paid Content

Location data’s dirty secret: How accuracy is getting lost in today’s data shuffle

Location data is revolutionizing the way brands reach their customers. From determining where consumers are most likely to shop during the holiday season, to identifying frequent business travelers who commute past a billboard every day, marketers are using location data to define, analyze and target audiences in ways never before possible.

So it’s no wonder that location-targeted mobile ad revenues are expected to grow from $4.3 billion in 2014 to a staggering $18.2 billion in 2019, according to a BIA Kelsey Local Media Forecast.

Underlying this growth is a new understanding of the recipient — the consumer. “Mobile’s ability to bridge the gap between the physical and digital worlds, coupled with advances in location-based data analysis, have made mobile the means for defining consumers and understanding specific moments when they are most receptive during the purchase journey,” says Duncan McCall, CEO and co-founder of mobile consumer intelligence company PlaceIQ.

By pinpointing where customers are located, what’s surrounding them and what their intent is, brands can “enable and enhance their experience in ways that make the exchange valuable to them,” adds Philip Hendrix, founder and director of immr, a research and consulting firm.

However, unbeknownst to many marketers, location data can be a mixed blessing. In the best of cases, it can be a golden opportunity to gain a competitive edge in a crowded advertising arena. In the worst of scenarios: A serious blow to a brand’s reputation — and wallet.

The quality of GPS data, for example, can dramatically degrade indoors. While cell triangulation data can identify user location within a broad area such as a zip code or city, it tends to be less precise. Registration data is often limited in relevance to a mobile user’s home zip code and only at the moment of registration. And IP addresses can diverge significantly from the actual location of a mobile user. Only Wi-Fi data promises high levels of accuracy and precision with its ability to identify user location within 10 to 100 meters of a Wi-Fi signal.

In fact, a report from the MMA offers a laundry list of variables that negatively impact location data quality. Culprits include a “lack of accuracy standards and market education,” “urban density,” “inaccurate interpretations” of location data that have been translated into a latitude/longitude coordinate and poor “data freshness.” Another offender: Centroid processing, an approach that lets publishers derive center-points of locations using a zip code or state and then deliver this information as a proxy for a user’s real-time location.

Technology and accountability pave the way toward greater precision and accuracy

Steps are being taken to improve location data accuracy. For many, the answer is technology that can process opted-in movement signals for millions of devices and attribute each one to a specific latitude/longitude and unique device ID.

“You really need to trust your counterpart and know where they’re getting their location data from,” says Joe Laszlo, senior director of the Mobile Marketing Center of Excellence at the Interactive Advertising Bureau (IAB). “In a completely open, no holds-barred environment, the inventory could be coming from anywhere and the buyer could be anybody. There’s already some cynicism on the part of buyers as far as whether location data are accurate.”

Beyond trust, Laszlo recommends that brands seek out a third party that “can keep an eye on the location data that’s coming through the exchange and identify data that seems suspicious or outright unlikely.” Marketers must educate themselves on these issues and ask to see how vendors are dealing with them.

New strategies aside, Greg Stuart, CEO of the Mobile Marketing Association, thinks it’s likely that the MMA “will eventually suggest an auditing of [location data-gathering] technologies and data sets so that marketers know exactly what they’re getting.”

Until that time, though, location data will continue to have a profound impact on how brands reach target audiences, engage consumers and drive marketing campaign ROI. The inherent inaccuracies will, in the interim, simply be a small asterisk on the path toward complete precision. “Without a doubt, location data is going to become not only more and more precise, but more and more ubiquitous,” predicts Hendrix. “Anything that does not leverage and make use of location in an intelligent way will go the way of banner ads.”

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